Indonesia Becomes Southeast Asia’s Biggest Content Market, Buoyed by Forecast of Strong Online Growth – Study

The video industry in Indonesia is set for rapid growth over the next five years as online services overtake conventional TV’s market share, according to new study.

Total video industry revenues (free TV, pay-TV and online video) are expected to grow at 8% compound average growth rate, according to a briefing by Singapore-based research firm Media Partners Asia. The researcher forecasts the market expanding from $2.5 billion in the current year to £3.7 billion in 2028. At the same time, TV’s share, including net advertising and subscriptions, is forecast to drop from 56$ in 2023 to 48% in 2028.

The shift to online is powered by a combination of user-generated-content, social video, and various forms of premium video-on-demand, including freemium and SVOD platforms.

The forecasts suggest that Indonesia, the region’s most populous and geographically scattered country, is finally delivering on its long-anticipated growth promises, with cellular and other digital modes driving usage and spending more effectively than broadband, satellite or over-the-air transmission.

Media Partners Asia forecasts that TV advertising will grow at 4.5% CAGR over the next five years to end 2028 with a 40% market share versus 35% in 2023.

“SCMA and MNC will remain market leaders in terms of monetization with SCMA a clear beneficiary from the shift to DTT. Linear-based pay-TV adoption will continue to decline. Pay-TV’s incremental growth remains anchored to bundles of home broadband and pay-TV offered by players such as Telkom Indonesia and Axiata-owned LinkNet,” said Media Partners Asia.

Online’s share of total video industry revenue will grow from 44% in 2023 to 52% by 2028. UGC and social video, especially YouTube and TikTok, lead monetization and the UGC category is expected to grow advertising at a 12% CAGR over the next 5 years, giving it a 26% share of total video industry revenues by 2028.

SVOD is expected to grow almost as fast, at 11% CAGR over the 2023-28 period, to grow market share in total video from 16% to 19%.

Premium ad-supported VOD (AVOD) is forecast grow at 16% CAGR, albeit from a low base, with its share of the total Indonesian video market rising from 5% to 7% over the 2023-28 period.

Indonesian content investment grew 13% in 2022 to $979 million, representing Southeast Asia’s largest video content market, according to the researcher.

Free-to-air remains the largest video content investment segment. But online video content (local entertainment and sports) investment is the fastest growing. Online content spending is being driven up as Netflix, Amazon and SCMA’s Vidio continue to invest. MPA projects that video industry content investment will grow 6% to just over US$1 billion in 2023.

“Indonesia’s advertising economy endured a poor first half of 2023. This will be partially offset by a stronger second half. TV is in the doldrums with annual ad declines over 2022 and 2023. TV ratings continue their gradual decline as audiences drift online. Free-TV remains critical for mass ad campaigns, but growth is capped, held up largely by local consumer brands,” said MPA executive director Vivek Couto said.

“Meanwhile, Indonesia remains Southeast Asia’s most intense battleground for streamers. By consumption and value, it is the largest market in Southeast Asia Improvements in the quality of local content, combined with the proven viability of Korea content and localized tier-1 US content, has helped drive user acquisition and engagement. More rational pricing and packaging is helping to slowly boost per-subscriber economics.

“The challenge remains the growth of free VOD platforms YouTube and TikTok. Both dominate viewership on mobile, while YouTube is also increasingly popular on CTV. YouTube also remains the VOD category leader in terms of revenues by some distance, though TikTok is growing rapidly and Netflix leads SVOD.”

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